MORNING MESSAGE: Four Ways The Deal Hurts You
OurFuture.org's Richard Eskow: "1. You'll be less likely to find a job if you're looking. If you've got a job, you're less likely to earn more money - and more likely to lose it ... 2. Your housing value is likely to suffer ... 3. Your old age just got scarier ... 4. Your tax bill is likely to go way up."
What Does The Deal Do Now?
Mother Jones' Andy Kroll details how deep the cuts would go: "Nearly $570 billion of that would come from what's called 'non-defense discretionary spending.' ... education and job training, air traffic control, health research, border security, physical infrastructure, environmental and consumer protection, child care, nutrition, law enforcement, and more ... The president has boasted that his deal with the GOP will usher in an era featuring 'the lowest level of annual domestic spending since Dwight Eisenhower was president.' But Melinda Pierce, a lobbyist with the Sierra Club, says the plan could choke off funding needed to enforce the bedrock environmental protection laws on the books, including as the Clean Water and Clean Air Acts. 'Remember, the Eisenhower era was before we passed the Clean Water Act and the Clean Air Act,' Pierce says..."
Pentagon braces for steep cuts. NYT: "The Pentagon began grappling on Monday with the possibility that it will have to cut hundreds of billions of dollars from the military budget over the next decade, but there were so few details in the debt ceiling deal reached by the White House and Congress that confusion over the actual size of the reductions was rampant."
But the Pentagon could do it. W. Post: "The larger and more painful cuts of an additional $600 billion would be triggered only if Republicans and Democrats cannot come to an agreement on a second round of spending cuts in the next four months. 'You could reasonably make those cuts as long as you were willing to rethink our military strategy, not allow for any sacred cows and cut ruthlessly,' said Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments, an influential defense think tank with close ties to the Pentagon."
Grad student loans cut to protect Pell grants. USA Today: "The maximum Pell grant of $5,550 would be preserved for an estimated 9 million undergraduates ... To pay for that, graduate students who get federally subsidized loans would see the interest on those loans begin to accrue while they're still in school, beginning July 1 next year ..."
Compromise will clarify the 2012 debate, says W. Post's Karen Tumulty: "The Republican vision is of a dramatically smaller government and of a budget that is balanced without raising taxes. Democrats argue for what Obama describes as a balanced approach, one that includes new revenue and treads cautiously around Social Security, Medicare and social programs that provide a safety net for the poor."
All major presidential candidates oppose deal. LAT: "After Romney announced his opposition, former Obama White House spokesman Bill Burton accused him of having 'undermined John Boehner and [Senate GOP leader] Mitch McConnell and given aid and comfort to those who prefer default over compromise. A man who claims strength in his ability to lead our nation's economy would let it default for the first time in its history.'"
Tea Party leaders livid. USA Today: "...Tea Party activists and legislators say the GOP leadership squandered an opportunity to cut even more, and are warning legislators who voted for the deal Monday night that they would be targeted in the 2012 primaries."
House Dems livid. The Hill: "Vice President Biden addressed the concerns of House Democrats for more than 90 minutes Monday afternoon, but many lawmakers left the meeting angrier than when they entered."
What Will The Commission Do Next?
Attention shift to new joint committee designed to fast-track cuts to entitlements. NYT: "...proposals from the new panel, known as the Joint Select Committee on Deficit Reduction, would be considered under expedited procedures meant to guarantee an up-or-down vote in each house of Congress by Dec. 23. The proposals could not be amended ... If Congress does not promptly enact its recommendations, the government would automatically cut spending across the board in hundreds of military and nonmilitary programs, including Medicare."
Liberals plan grassroots pressure to avoid cuts to retirement security. Roll Call: "Robert Borosage, co-director of the liberal Campaign for America’s Future, told Roll Call that liberal groups opposing the deal will 'organize mass pressure' on the members of a committee who this fall will consider tax increases and entitlement programs under the new plan.
Borosage said his group is working with labor unions and MoveOn.org."
"Five cuts the debt commission might make to Medicare, Medicaid" from the W. Post: "1) Raise the Medicare eligibility age, increase premiums for wealthy recipients, and increase deductibles and co-pays ... 2) Give states more leeway in Medicaid to scale back eligibility and benefits, as well as payments to nursing homes ... 3) Improve care coordination between Medicare and Medicaid ... 4) Slashing prescription drug payments ... 5) Cutting Medicare provider payments."
TNR's Jonathan Chait suggests commission could split Republicans: "The anti-tax movement has held absolute sway within the GOP for two decades. But it's worth noting that the GOP has never had to choose among its constituencies in a zero-sum fiscal environment before ... But imagine Democrats insist on higher revenue, and they decide, sensibly enough, that failure to cut a bipartisan deal is better than $1.8 trillion in cuts ... then the entire defense lobby plus the entire medical and insurance lobbies turn fiercely against the very people with whom they had marched shoulder-to-shoulder under Bush. If the Democrats hold the line and insist on more revenue, the committee has the potential to split the GOP coalition wide open."
Dems Claim Next Up Is Jobs
VP Biden says after deal "we will talking about nothing but about jobs," reports Politico: "Senate Democrats hope they now have 'checked the box' on debt reduction and can move to an agenda focused on job creation ... Among the measures being considered: The federal highway program lapses on Sept. 30, and Senate Dems say a multi-year reauthorization would create more jobs than a shorter extension ... Sen. John Kerry (D-Mass.) has been reaching out to Republicans to get support for an infrastructure bank ... Extend 2% payroll tax break, which now expires at the end of 2011 ... Other tax breaks, such as making R&D tax credit permanent and renewing clean-energy manufacturing tax credit..."
Gas tax battle looms over transportation jobs bill. Politico: "... with most of the 18.4-cent tax per gallon of gasoline set to expire Sept. 30, renewing the tax could be the next political controversy ... some advocates are worried that the nation’s highway fund will be the next victim — while some conservatives sense an opportunity ... Experts say that an expiration of the gas tax would throw the nation’s transportation system into chaos."
Letting long-term unemployment insurance run out this year would worsen the jobs crisis, argued W. Post's Brad Plumer: "Currently, about 3.8 million people receive those additional, federally funded benefits scheduled to expire. The average benefit is about $1,300 a month. That comes to roughly $60 billion a year in spending. Now, UI benefits are one of the most effective forms of stimulus out there — people without jobs tend to spend most or all of the money, rather than pocket it. Moody’s chief economist Mark Zandi estimates that every dollar spent on unemployment benefits boosts GDP by about $1.60. Add it all up, and letting unemployment benefits dwindle could provide a hit to the economy of about 0.5 percent of GDP."
But is it possible under the terms of the deal? W. Post: "Dispirited liberals fumed Monday over the deal to raise the debt ceiling that would cut deeply across the government, include no new tax revenue from wealthy Americans and would not provide any additional stimulus for a lagging economy ... 'If anyone involved in this deal cares about jobs, it’s hard to see,' said Lawrence Mishel of the Economic Policy Institute. He also wondered how Obama expected to find room for his promised investments in research and infrastructure following a deal that so tightly constrains future spending."
With turn towards austerity, pressure on Fed to step up. NYT: "Its available options now are modest steps including replacing its promise to maintain low rates 'for an extended period' with a more specific commitment, like a six-month minimum. More aggressive steps could include tilting the composition of its investment portfolio toward longer-term Treasury securities, to increase the downward pressure on long-term rates. The most drastic step, which analysts also consider least likely, would be a decision to increase the size of its portfolio."
Bloomberg adds: "Any effort by Bernanke to expand the Fed’s $2.87 trillion balance sheet would probably meet resistance from district Fed presidents, including Philadelphia’s Charles Plosser, who have said bond purchases and low borrowing costs have already pushed up long-term inflation risks too high."
FAA Still Shut Down
House recesses, despite FAA shutdown. ThinkProgress: "That means the FAA shutdown, which began July 22, will likely last at least another month. Democrats on the House Transportation Committee are outraged, as Reps. Nick Rahall (D-WV) and Jerry Costello (D-IL) called the recess “irresponsible” and said they planned to write a letter to Cantor calling on him to keep the House in session until the FAA was re-authorized. Meanwhile, the FAA’s airport inspectors keep doing their jobs, even without pay..."
"Workers Rally to End Republican FAA Shutdown" reports AFL-CIO's Mike Hall: "...ome 4,000 FAA workers were immediately furloughed and dozens of airport improvement construction projects ground to a halt, threatening up to 90,000 jobs. Forty of those jobs were at the $6 million project to demolish the decommissioned FAA Airport Traffic Control Tower at New York’s LaGuardia International Airport ... workers, government officials and construction contractors gathered at LaGuardia to demand Congress pass the funding authorization that Republicans are holding hostage."
Women's Reproductive Health Covered
Insurers must cover contraception under new Affordable Care Act rules. W. Post: "... the Obama administration announced Monday that tens of millions of women will soon be able to get birth control, breast pumps, HIV tests and five other categories of preventive services without co-pays or other out-of-pocket insurance charges ... The mandate applies to private insurance and will take effect beginning Aug. 1, 2012, as plans renew ... The rules cover all prescription contraception approved by the Food and Drug Administration, including emergency options such as the so-called morning-after pill sold as Plan B and the more recently approved drug sold as Ella."
